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Compute the after-tax cost of debt for these bonds

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Reference no: EM13517875

Easy Slider Inc. sold a 15 year $1,000 face value bond with a 10 percent coupon rate. Interest is paid annually. After flotation costs, Easy Slider received $928 per bond. Compute the after-tax cost of debt for these bonds if the firm's marginal tax rate is 40 percent.

a. 6.0%
b. 6.6%
c. 7.8%
d. 7.2%

Reference no: EM13517875

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